The bill should have been introduced much earlier to provide better protection to individuals and businesses
by ALIFAH ZAINUDDIN/ pic by TMR FILE
THE long-awaited Covid-19 relief bill aimed at protecting individuals and companies due to the Covid-19 pandemic, though necessary, maybe a little too late for Malaysians.
The Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (Covid-19) Bill 2020, tabled last Wednesday by Law Minister Datuk Takiyuddin Hassan, seeks to provide an interim reprieve from certain legal action for non-residential leases, hire-purchase agreements, construction contracts, credit facilities, event agreements and tourism packages, among others.
It also seeks to temporarily change the existing insolvency law by increasing the monetary threshold for bankruptcy to RM100,000 from RM50,000.
The content of the bill is very much akin to laws that were passed earlier in New Zealand and Singapore in March and April respectively. Opposition MPs argued that the bill could have been introduced at a similar time.
Centre for Market Education CEO Dr Carmelo Ferlito recognised that the bill could have been introduced earlier.
However, he said there should not be expectations that the relief bill could get the economy to rebound.
“The relief bill should be accompanied by a more holistic strategy for the revival of the economy and I strongly believe that such an action cannot be taken by Malaysia alone, it needs to be coordinated at a wider level, at least at the Asean level.
“In fact, each measure at this point, even a massive and ambitious tax cut or incentives to investment would have limited impact if we do not allow the international dimension of the economy to be revived. It is time to think of a coordinated and gradual opening of borders at the Asean level,” he said.
“This would also have a tremendous impact on confidence — which is very much needed now. After this, an ambitious plan of tax cuts and fiscal incentives should be implemented,” he added.
Bangi MP Dr Ong Kian Ming (picture) said last week that the relief bill contained a saving provision in Clause 10 which states that any action taken before the law is gazetted will be deemed valid.
Since the bill requires the approval of the Senate, which would sit until Sept 23, before it is given royal assent and written into law, the earliest it can be gazetted is at the end of next month.
This meant that the law would only apply on actions that take place in the three months from the end of September until Dec 31, 2020. Any form of protection provided by the bill would not apply if legal actions and claims commenced or were concluded before the bill comes into force.
“(End September) is more than six months since the implementation of the Movement Control Order (MCO) on March 18. Six months later, what we have is a watered-down Covid-19 relief bill that is full of loopholes and comes too little, too late,” he said.
Malaysia’s quarterly GDP slumped to its worst since the Asian Financial Crisis in 1998, shrinking by 17.1% in the second quarter (2Q) as the spread of the Covid-19 disease brought economic activities to a standstill.
The country’s unemployment rate also took a beating in 2Q as it hit 5% in April — the highest in 30 years — before it peaked to a record-high 5.3% in May, accounting for 826,100 unemployed individuals. The rate declined to 4.9% or 773,200 people in June, following the reopening of more sectors under the Recovery MCO.
The Insolvency Department also recorded 787 bankruptcy cases between May and June this year, though it did not attribute them to the Covid-19 pandemic. It was noted, however, that the impact on debtors could only be gauged after a year given the six-month moratorium on loan repayments.